Mobile Augmented Reality: Beyond The Hype, A Glimpse Into The Mobile Future

Is mobile AR overhyped? Yes.

First of all, the technology is not new at all. It is simply moving from PC and industrial environments to a marketing and mobile context.

Let’s face the reality: for now it is primarily used by brands willing to launch innovative mobile services and in search of a “wow” effect.

Few consumers are currently holding up their smartphone to interact with their environment as a totally natural gesture. Whether you look at the installed base of Junaio or Layar’s mobile users, this is a niche market.

From a pure technology standpoint, AR requires object recognition and computerization on the mobile device itself, as well as 3D rendering to superimpose images on the real world. This is a technology that only a few companies such as Metaio and Total Immersion really master.

The information displayed must be ultra-accurate and delivered in a perfectly seamless way. This is still far from being the norm for many of the so-called mobile AR applications.

To put it succinctly, mobile AR is not yet delivering its promise. There are certainly more significant short-term opportunities to tap into with Web-based and kiosk-based AR solutions, in particular related to eCommerce.

However, Forrester believes consumer product strategists should not dismiss the technology. On the contrary, it is likely to trigger disruption in the years to come and to open up new opportunities.

Is this a key technology moving forward? Yes.

Think of mobile AR as: “A way to click on the real world with your phone the way computer users navigate their desktop with a mouse. Just point in the direction you want to search, or at a place you want more info about,” which is how GeoVector summed it up in promoting its World Surfer application.

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How Mature Is Your Mobile Strategy?

How Mature Is Your Mobile Strategy?

To help consumer product strategists and executives answer this question and benchmark their mobile consumer strategy, Forrester fielded a Global Mobile Maturity Online Survey in Q3 2010. We interviewed more than 200 executives in charge of their company’s mobile strategy across the globe (40% in the US, 40% in Europe, and 20% in the rest of the world).

First, only a third of respondents said that they had had a mobile strategy in place for more than a year. Companies in this situation are from many different industries, but online players, media companies, and financial institutions are often more advanced. Forty-five percent of respondents are just waking up to the mobile opportunity and thinking about integrating mobile into their overall corporate strategy — just like they did a decade ago with the emerging online channel.

For the majority of respondents, mobile is mainly seen as a way to increase customer engagement, satisfaction, and loyalty. Mobile is less useful as a way to acquire customers and generate direct revenues — just 2% expect to generate more than $10 million in mobile revenues for 2010. While companies are assigning clear objectives to the emerging mobile platform, 23% of respondents still consider their primary objective with mobile to be to “test and learn.”

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Are Nokia's Ovi Services Gaining Momentum?

Because of poor execution in 2009, the industry consensus — particularly in the US, where Nokia has a small footprint — was that Nokia was not in a position to catch up with the Apple App Store or Android Market. Reports of the Ovi Store’s death were greatly exaggerated: Nokia simply cannot afford to fail. On the contrary, it is now catching up, particularly in emerging countries, where Nokia clearly differentiates thanks to its unique local presence and relationships with operators (mobile billing is currently supported in around 30 countries).

Nokia just issued a press release this morning insisting that Ovi Store downloads are now reaching 2.3 million per day for a total installed base of 140 million active users. Bear in mind that a user is considered active on a six-month period and that this figure includes multiple Ovi experiences, including the 17 million Ovi mail and chat users as well as users of Ovi Maps, Ovi music, and Ovi life tools.

That's an increase versus last May (1.7 million) and versus the data that was announced at Nokia World two weeks ago (2 million). More interestingly, 200,000 people are signing up daily to Ovi. That's a significant trend.

I'll stick to my initial thoughts about Nokia's transformation journey: the challenge is still to offer a fully integrated Ovi brand experience.

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Nokia's Transformation Journey

I am attending Nokia World in London. For those of you not familiar with this event, that’s usually the conference where Nokia shares its vision and strategy, announces new products and services, and demonstrates its latest innovation. This is also an interesting opportunity to hear thought leaders share their vision of the mobile industry (this year, Sir Tim Berners-Lee). See the agenda here.

The 2010 edition is already unique in Nokia’s history due to the recent appointment of Stephen Elop as the new CEO and yesterday’s resignation of Anssi Vanjoki, currently EVP of Nokia's Mobile Solutions unit. Needless to say there is lots of speculation about Nokia’s future. Let me wrap up some thoughts:

  • It’s precisely all about organizational and cultural issues. No one should be surprised to see other departures as well as the arrival of new executives close to the newly appointed CEO. Nokia’s real challenge is to make sure these changes are implemented quickly enough -- without totally disrupting existing processes -- to keep pace with innovation. The simple fact that Nokia appointed a non-Finnish CEO, coming from the US and from Microsoft and the software industry, is another acknowledgment that Silicon Valley has become the new mobile innovation hub. Nokia’s cultural heritage is precisely to constantly reinvent itself. Tectonic shifts are shaking up the traditional mobile ecosystem, and Nokia needs to be much more agile to compete with the likes of Google and Apple.
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The Future Of Application Stores

Apple reinvented the distribution of products and services on mobile phones, opening up direct-to-consumer opportunities for nontelecom companies. The numbers look impressive — more than 5 billion downloads and $1 billion paid to developers in the two years since the launch of the Apple App Store.

However, it also generated $429 million for Apple itself in two years. These revenues are not meaningful to Apple’s core revenues. Due to the limited number of paid apps and their significant concentration among games and navigation apps, it is likely that a significant number of independent developers have not recouped their investments via the current revenue-sharing model. The recent launch of iAd is a way for Apple to maintain the attractiveness of its platform, allowing third parties that provide free apps to develop sustainable business models.

But, despite all the hype around apps, only a minority of consumers download them monthly. A recent Forrester survey of more than 25,000 European adults shows that only 4% of all mobile users and 15% of smartphone users report downloading apps at least once per month. However, the fact that 21% of all European mobile users consider apps to be an important feature when choosing a new mobile handset highlights the large gap between today’s limited usage of apps and consumer awareness and interest.

The application store market is still nascent, but it is evolving quickly. However, in the longer run, few players will be able to address the key factors that will make them a success:

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The State Of Mobile Commerce In Europe

I booked my first hotel night via a mobile device a year ago.

I didn’t even think about the fact that it would be considered an “mCommerce” transaction, as I simply booked it directly on the hotel group’s Web site via the browser of my mobile phone. The site wasn’t actually optimized for mobile devices, but it was possible to enter my credit card details via a secure Web transaction. That’s not ideal, so I wonder how many mobile transactions that firm has missed simply because it doesn’t provide a compelling user experience.

 European mobile commerce is still at an early stage. Digital content is still the primary product purchased via mobile devices, but European consumers show growing interest in using their mobile phones for all sorts of shopping activities. I have recently contributed to a new report on the state of mobile commerce in Europe, written by my colleagues serving eBusiness Channel and Strategy Professionals. The report reveals that:

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Profiling Your Best Mobile Customers

Nine months ago, I wondered if there was a life beyond the iPhone and beyond mobile applications. Recent data gathered by Forrester makes me think that such a life exists!

Bear with me one second. I am not denying the fact that iPhone owners are the heaviest users of mobile services. I am just saying that there are plenty of opportunities in the mobile space on other smartphone platforms and with selected audiences. Mobile is not just about applications or mobile Web sites. Even good old SMS can be powerful depending on the objectives you have set and the audiences you want to interact with.

What’s certain is that iPhone owners can only be a subset of your customer base. Only 2% of European mobile users report having an iPhone as their main mobile phone. Does that mean that there are no opportunities to target more mainstream audiences? Not at all.

A much larger near- and medium-term opportunity exists within other groups — particularly among young consumers, business users, and consumers with flat-rate data plans — as well as, increasingly, with new, competing smartphone platforms. In fact, if you’re not targeting them, you’re neglecting the majority of your customer base — including many consumers who are mobile-savvy but don’t have an iPhone.

Let’s make this even clearer. 96% of European 16- to 24-year-olds do not own an iPhone. Should you avoid engaging with youth via mobile because of that? I don’t think so.

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The New Frontier By Orange -- Conquests 2015

Orange announced today its new industrial project, "conquests 2015." After NExT from Didier Lombard, the recently appointed CEO is now communicating Orange's five-year action plan.

One of the main objectives of the plan is the "conquest of employee pride" and the recruitment of 10,000 additional employees (including the 3,500 already announced for 2010) between 2010 and 2012. Following the unprecedented social crisis that took place in France, the company had no other choice than to offer a new management vision and to make sure employees can participate in the future of the company, involving them in such a way that they feel part of a long-term project.

Beyond this initial objective, a couple of other interesting conquests have been announced:

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Help Us Benchmark "Mobile Maturity" — Take Part In Our Survey And Get A Free Executive Summary

Like my colleagues who serve Interactive Marketing professionals and are working on a study to benchmark social media maturity in organizations, we’re also conducting a new research project to benchmark how companies define and implement their mobile consumer approach.

Taking a step back, mobile phones have changed the way we live and communicate in the past 10 years. They’ve had a deep effect on society. At Forrester, we believe they’ll change the way companies do business in the next 10 years. Back in 2007, the iPhone created a market catalyst, not only in the way consumers use and perceive mobile phones but also in the way companies engage with their customers in the mobile environment. Since then, a growing number of companies have launched a mobile consumer presence and started to define a road map for their mobile products and services. Some of them are still testing and learning, while many companies are starting to integrate mobile in their corporate strategies, and others have already created dedicated mobile business units and plan to generate millions of €/$ per month in direct revenues. They follow different objectives — whether building brand loyalty, delivering added-value services in a multichannel experience, reducing costs, or acquiring new customers. 

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Back From Italy

I spent some time last week in Italy, where I regularly visit clients to discuss mobile opportunities.

I always try to spend a few hours visiting operators' shops and getting hold of some brochures. The ones below from Telecom Italia are very typical of a certain type of Italian ad...

Beyond this, however Italy is a very interesting market to study. It is wrongly perceived as leading in Europe because of its huge penetration rate — more than 140% — which doesn’t mean much, per se. Put simply, it links to the high ratio of prepay phones and to the multi-SIM phenomenon, in which Italian consumers take advantage of the most attractive tariffs. For example, handset subsidies are not common and were introduced by Tre (greenfield operator Hutchison Whampoa), the operator with the highest postpay market share.

However, Italian consumers are starting to demonstrate sophisticated mobile usage. An example: At the end of 2009, 15% of Italian online users accessed the mobile Internet on a weekly basis and more than 10% were interested in receiving contextualized mobile coupons. I see numerous examples of mobile innovation, and many companies (from media groups to banks) are starting to integrate mobile into their corporate strategies. I am, however, surprised by the lack of a cohesive and consistent approach. Few companies have a clear understanding of how their own customers use mobile services and what their attitudes toward mobile are. That's the first step in assessing mobile opportunities. For example, does it make sense to launch an Android application if you don't know how many of your customers own an Android device? Few companies have defined clear and measurable objectives or have a vision of how they want to integrate mobile as part of a multichannel and multimedia approach moving forward.

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